Vital Statistics:
Last | Change | |
S&P futures | 4,609 | -42.2 |
Oil (WTI) | 82.42 | 0.23 |
10 year government bond yield | 1.71% | |
30 year fixed rate mortgage | 3.61% |
Stocks are lower this morning as earnings season kicks off. Bonds and MBS are up small.
Retail Sales fell 1.9% MOM in December, according to the Census Bureau. Sales were up big compared to a year ago. For the full year, retail sales were up 19.3% compared to 2020. Gas stations and food / drinking places were big drivers of the annual increases.
Industrial Production fell 0.1% MOM in December, while manufacturing production fell 0.3%. These numbers came in well below expectations. Capacity Utilization slipped to 76.5%.
Bank earnings are rolling in. JP Morgan reported record annual earnings, however Q4 numbers were down compared to a year ago. Mortgage originations increased 30% YOY, and were up compared to Q3. Net income was bolstered by investment banking revenue as well as reserve releases. The stock is down a few percent pre-open.
Wells Fargo reported quarterly earnings more than doubled compared to the 4th quarter of 2020. Home lending earnings fell 8% QOQ and YOY, driven by lower volumes and lower gain on sale margins. Volumes were down 11% YOY. The stock is up about a percent this morning.
Lael Brainard signaled a March rate hike in her testimony in front of Congress yesterday. The Fed “has projected several rate hikes over the course of the year. We will be in a position to do that … as soon as our purchases are terminated.” The Fed should be done with its QE adjustments in March, so presumably this means a March hike is on the table.
Consumer sentiment is slipping, according to the University of Michigan Consumer Sentiment Survey. Inflation is a big driver:
When asked to assess their finances, 33% reported being worse off financially than a year earlier, just above the April 2020 shutdown low of 32%, the worst reading since 2014. Twice as many households with incomes in the bottom third as in the top third reported worsening finances (40% vs. 20%). Inflationary erosion of living standards was the main explanation offered by these consumers. The importance of inflation in determining their future financial prospects was dominated by how consumers judged their future inflation-adjusted incomes (see the chart). Nearly half of all consumers (48%) anticipated that the inflation rate would outdistance income increases to produce real income declines. Just 17% anticipated real income gains in 2022.
Filed under: Economy |
I appreciate Greenwald upgrading his trolling game:
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The media is comical at this point. And the NPCs just keep echoing the talking points.
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Good read:
https://email.punchbowl.news/t/ViewEmail/t/B1F44FC6F9A9E1332540EF23F30FEDED/F0F0D2F064DCB4FC1D419C9787CC9684
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It isn’t going to get better for the left as the Fed starts to take away the punch bowl.
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And another one:
https://reason.com/volokh/2022/01/11/uw-administrator-says-prof-created-toxic-environment-with-his-land-non-acknowledgment/
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Interesting piece on the machinations with Manchin.
https://www.politico.com/news/2022/01/14/joe-manchin-steve-clemons-527103
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So, we’ve gone from there being no chance of the FBI was involved in 1/6 to, Ackshually, the FBI was helping the 1/6 crew.
https://m.dailykos.com/stories/2022/1/14/2074756/-While-FBI-offers-up-flimsy-reasons-for-being-unprepared-on-Jan-6-its-record-tells-the-real-story
How long will this Modified Limited Hangout last?
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Lol! Those poor dumb fucks.
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Looks like Jonathan Chait is the first Prog to say that Desantis is worse than Trump.
https://nymag.com/intelligencer/2022/01/ron-desantis-2024-president-campaign-trump-covid-lockdown-booster-vaccine.html
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Ezra Klein believes that the lack of central planning of the economy is Joe Biden’s biggest mistake:
Yes, things can get worse.
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It amazes me that these dipshits never learned that central planning is an economic disaster.
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They know, they just want power.
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Well there’s only the history of the entire 20th century to look at.
But you know … they are smarter than those old commies. This time it will work out great because they are so smart. And technocratic. And stuff.
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It never dawns on them that government control of the economy results in underperformance, which necessitates further control, which causes more underperformance.
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For them it’s a feature, not a bug.
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Maybe for a few George Soros types. The rest are useful idiots. Emphasis on “idiot”. They really believe central planning can have positive outcomes.
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So Biden’s task now is clear: to build a government that can create supply, not just demand.”
But don’t call Ezra a communist!
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I wonder if it ever occurred to Ezra that these viewpoints about relying on markets emerged out of the failures of government management.
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More fundamentally, the failure of the Biden administration to submit a purchase order for masks or test kits in a timely manner is not a “market failure”.
However, what the previous lack of availability of N95 masks does indicate is what happens when you have monopoly suppliers susceptible to pressure from the government to restrict supply so as to make sure it’s reserved for only the “right” people.
I’m referring to Amazon refusing to sell N95 masks in 2020 due to the government restricting them to health care providers.
Now there’s plenty of them on Amazon.
Lastly, Biden ought to focus on things like the rampant package thefts going on in Los Angeles if he wants to help supply issues. I assume you guys have all seen the video of the train yard with all the discarded stolen boxes along side the tracks.
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More fundamentally, the failure of the Biden administration to submit a purchase order for masks or test kits in a timely manner is not a “market failure”.
This seems transparently obvious to me, like a clear causative factor that cannot possibly be ignored over overlooked but it seems invisible to Ezra and the elite class commenting on it now, generally.
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jnc:
More fundamentally, the failure of the Biden administration to submit a purchase order for masks or test kits in a timely manner is not a “market failure”.
None of the current shortages or supply chain issues are a “market failure”. The inability of businesses to have enough workers because workers would rather collect Covid unemployment is not a “market failure”. Nor is it a market failure when a producer is required to stop production to retool its factory in order to conform to new Covid regulations. It isn’t even a market failure if production has to decrease because too many workers are out sick with Covid.
Ezra is a pure ideologue who couldn’t think his way out of a paper bag.
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but it seems invisible to Ezra and the elite class commenting on it now, generally.
The academic left has done yeoman’s work memory-holing all the examples of government failure when meddling in markets.
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Need some politicians willing to repeat the message that in most areas government is the problem, not the solution.
Also central planning always fails. Central regulation works to some extent—establishing standards, a common currency, that sort of thing. Although the government doesn’t necessarily have to do that.
But the government trying to manage everything—product production, career choices, shipping, warehousing, pay scales … it fails spectacularly every time it’s tried. “Wreckage” indeed.
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It’s also hard if the people supposedly in charge of the central planning are out on paternity leave.
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Do you get the impression that now he’s back on the job he’s doing anything different? I haven’t heard of anything he’s actually doing in his job. Might have just missed it.
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If they would just open their eyes they would see that China is imploding over a government-driven real estate bubble.
But they won’t get it. They can’t.
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Prolly cause it’s effecting their own portfolio. Dollars to donuts we’ll see a proposal for a trillion dollar plus bailout of
China shortly.
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In case anyone had any doubt if the bad old days were back.
https://nypost.com/2022/01/15/woman-pushed-to-her-death-at-times-square-subway-station/
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The NYPD said its hate crimes task force was reviewing the incident but it wasn’t being officially investigated as a hate crime.
Well thank goodness it wasn’t a hate crime! That will surely bring comfort to the victim’s family.
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Thought crimes as a category are strictly for the benefit of the elites in charge.
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The end of the Loudon transgender high school rape story:
https://www.dailywire.com/news/breaking-loudoun-rapist-sentenced-put-on-sex-offender-registry-for-life
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I wonder if they’ll listen:
“Carville: Dems ‘whine too much,’ need to highlight accomplishments ahead of midterms”
https://www.politico.com/news/2022/01/16/james-carville-democrats-whine-too-much-527232
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The accomplishments being what?
That said, Carville might be a lunatic partisan on most issues but he understands whinging doesn’t win elections. But this goes back to the New Democrats apparent inability to read the room. They are so bad at gauging public sentiment right now, I think, that it makes the GOP blush in embarrassment for them.
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Imagine, communities deciding what their kids should be taught.
https://m.dailykos.com/stories/2022/1/17/2074022/-New-Indiana-GOP-bill-allows-everyone-except-teachers-to-decide-what-is-actual-history
The nerve!
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they only pay the salaries of these teachers and are the biggest stakeholders.
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As if that entitles you to make any input.
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I laughed.
https://www.foxnews.com/politics/avenatti-claims-prison-officials-only-let-him-read-trumps-art-of-the-deal
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Entitlement to have input elevates when you start showing up with pitchforks.
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A: Teachers don’t decide what’s taught in public school systems. It’s mostly the state board of education, with local boards also having input but primarily the state board. And in most cases the folks on the state board do not have to have ever taught in a classroom, and in many cases have not.
B: Neither the teachers nor the state boards are any more qualified than the rest of the community at large to decide what should be taught and how. They are just people for whom their EdD. provides no special knowledge or understanding or insight. To reference Buckley, you’d get a better public education if the curriculum were determined by the first 500 names out of the phone book.
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Good read:
https://www.tabletmag.com/sections/news/articles/the-cult-of-smart
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“We know equity and excellence go hand in hand. They are not mutually exclusive,” Superintendent Scott Brabrand said about changing the admissions process.
But they kind of are mutually exclusive. Just saying the words isn’t an incantation that makes them true.
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“The selective schools they attend look strong on performance metrics because they only enroll students who are high achieving,” University of Chicago education researcher Ellen Allensworth, who helped perform the 2016 study, told me in an interview.
A more recent study from the same city looked specifically at disadvantaged students who were able to gain entry, finding that admissions to a selective high school did not improve grades or the likelihood of attending a selective college.
These studies should not be necessary. “Falling from 1000 feet is generally fatal, a new study shows”. Even the point of school is not to take formless blobs of clay and turn them into engineers, but make sure people already doing well academically can perform at their optimum. That’s the whole point.
And selective high schools may not be the only place where we’re putting way too much faith in formal education to change our kids’ outcomes.
Given I see public education up close, I would say the role of formal education is . . . helpful but doesn’t perform miracles. I have no doubt providing the only structure in their lives, for some students, means they turn out better than they otherwise would have. But one of the ways that happens is providing structure for those who don’t have it otherwise, and working to get a basic education into those who otherwise would not have even that.
The role is not to provide environment which can turn a child from a single parent home where the mother doesn’t have a high school education and lives off disability . . . into a lawyer or a doctor. That story can happen but it won’t be the school system making that happen.
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FYI Brent:
https://www.vox.com/22883459/martin-luther-king-jr-fair-housing-act-housing-crisis
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the “disparate impact” standard is actually quite difficult to reach
I thought the whole point of disparate impact is that you don’t have to prove anything any more. It was a way to spot liberal lawyers a few points before the game began.
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Decades after Martin Luther King Jr.’s fight, American cities still segregate communities by race and class
“Cities” don’t segregate people by race or even class, per se. People self-segregate.
The only way for people not to be segregated by class is for them all to be in the same “class”, which will never happen because the whole idea behind identity politics is that you are superior to everyone else. Based on whatever criteria.
“Nixon’s Department of Housing and Urban Development Secretary George Romney did attempt to use the FHA to meet its goal and actually desegregate white communities”
And had that happened, the result would have been nobody got federal funding for projects unless they literally did forced relocation. Why is that the government’s job, anyway, to “desegregate white communities”? Why not just make sure there’s no discrimination and let it go from there?
Love how Hannah-Jones is used as an authority given she’s utterly unreliable as any kind of authority. Pretty much by her own admission.
“All of this has resulted in the prices of housing and rent skyrocketing. Over the last year, diminished supply as a result of these laws has pushed the cost of shelter higher than ever, straining the pockets of working-class, middle-class, and even some high-income Americans.”
How did THAT happen? Racism, no doubt.
“(Perhaps it has something to do with the fact that economically segregationist communities are often ones led by Democrats — in wealthy cities and suburbs, economic discrimination is a normal facet of life.)”
That’s weird. How did THAT get in there?
“We know in predominantly white communities that wealthy whites will use zoning to exclude lower-income whites. We also know, for example, in Prince George’s County, Maryland, a predominantly Black community, that there are efforts by wealthier Black people to exclude lower-income Black people through exclusionary zoning.”
So no one but us should be able to create a community that we consider healthy and productive? And, you know, safe. Wealthy black people aren’t discriminating on race and don’t dislike poor people for being poor. It tends to be the crime that comes with that. If you want less discrimination about “affordable” housing, have it comes with a few 100 extra beat cops and prosecutors who keep violent criminals in jail.
Good lord the miracles people think the government can perform because “the right policy”.
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It’s the belief at the root of Marxism and Socialism, that man can be perfected.
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““Cities” don’t segregate people by race or even class, per se. ”
City governments did as did state and federal government, but it’s been illegal for decades.
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The article presents it as something that’s happening pretty much everywhere, right now.
🙂
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